Investors shift to tokenized Treasuries as Fed rate hike expectations rise, reducing appetite for spot crypto assets.
The value of tokenized U.S. Treasuries reached a record $15.35 billion, surpassing the previous peak of $15.10 billion set in mid-April. This growth reflects investor caution as markets price in a higher likelihood of a Federal Reserve interest rate increase, reversing earlier expectations for rate cuts.
Traders are favoring yield-bearing tokenized assets over spot cryptocurrencies like bitcoin, which remains above $80,000 but struggles to break higher. Rising inflation and real rates, along with miner balance-sheet pressures, may limit further gains in crypto markets.
Market volatility gauges indicate short-term stability, though upcoming macroeconomic data and political events could shift sentiment. The U.S. PPI report, Clarity Act vote, and a Trump-Xi summit are among key developments to watch.